OPEC’s decision last week to retain current oil production of 30 millions barrels per day undermines the potential for an oil price recovery in 2015, researchers at Wood Mackenzie said. The retention of current oil production by OPEC puts oil demand growth as the continued focus of crude oil pricing, Wood Mackenzie’s Ann-Louise Hittle said. Total world oil supply growth, however, is expected to continue to outpace demand next year.
Wood Mackenzie said the price of West Texas Intermediate crude would have to fall to $65 per barrel for several quarters in order for U.S. tight oil production to slow down. Such prices could lead to at least 600,000 barrels per day being removed from the market, which would help curb over-supply.
A persistent slump in oil prices into 2015 could bring OPEC’s members back into the meeting room early next year as the group’s ministers continue to monitor market conditions.
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